The price drop marks the third consecutive fall for Category A COEs, signaling a shift in the market.
In the latest Certificate of Entitlement (COE) tender held on November 20, 2024, premiums dropped across most categories, except for commercial vehicles. The price for a Category A COE, which is meant for smaller cars and electric vehicles (EVs), fell by 10%, down $10,000 to $89,889. This marks the third consecutive decline for Category A COEs, with the previous largest drop occurring earlier in 2024.
The premium for a Category B COE, used for larger and more powerful vehicles, also saw a decrease, dropping by 2.7% to $105,081. Despite these drops, COE prices remain above levels seen in 2021, a period when prices were among the lowest due to the pandemic-related disruptions.
The Open category (Category E) COE, which is typically used for larger cars, ended at $107,501, a 1.4% decrease from the previous round. Motorcycle COEs (Category D) saw a 4.6% drop, coming in at $8,669. However, the commercial vehicle COE (Category C) bucked the trend with a 1% rise, reaching $69,000.
This trend in falling COE prices comes amid a slowdown in car sales, as reflected by the decrease in the number of bids for car COEs. Dealers believe this could be partly due to the recent government announcement to inject up to 20,000 COEs into the market in the coming years, which has caused some consumers to hold back their purchases. Many dealers expect the Category A COE price to rebound slightly, especially as they anticipate a possible uptick in demand due to the lower premiums.
Motor dealers are hopeful that the drop in COE prices will entice consumers back to showrooms, although some are cautioning that it is still uncertain whether these price reductions will last.
